Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Thematic (Sector/Industry)

<ul><li>The Energy Regulatory Commission (ERC) resolved to set the electricity tariff at Bt4.18/unit and Ft at Bt0.3972/unit for May to August 2024, flat from the previous period.</li><li>These rates align with the Case 3 scenario, representing the lowest figures, and are in line with our 2024E projections, supported by the declining trend in gas costs, including lower LNG prices and increased G1/61 gas volume.</li><li>The decision is expected to facilitate effective management of electricity tariffs and enhance the opportunities and continuity for EGAT's reclamation of the Ft subsidy, which is nearing Bt100bn. </li></ul>

The Energy Regulatory Commission (ERC) resolved to set the electricity tariff at Bt4.18/unit and Ft at Bt0.3972/unit for May to August 2024, flat from the previous period.These rates align with the Case 3 scenario, representing the lowest figures, and are in line with our 2024E projections, supported by the declining trend in gas costs, including lower LNG prices and increased G1/61 gas volume.The decision is expected to facilitate effective management of electricity tariffs and enhance the opportunities and continuity for EGAT's reclamation of the Ft subsidy, which is nearing Bt100bn. 

Energy (Power) - Flat Electricity Tariff and Ft for May to August

Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

Pi Research

Thai Equity - Bottom-up - Equities

Leading, full-service investment firm in Thailand

Pi Securities PCL, Thailand

Pi Securities is a well known securities company with 40 years experience in the industry, serving more than 60,000 clients. We offer one - stop service providing full range of financial products and services including extensive Brokerage, Proprietary Trading (Equities and Bonds), Advisory Services, Structured Products.

Moreover, our new research team tailored for institutional clients to focus on mid to small cap of Thai equities and trading strategies. Our services offered to our premium clients also include arrangement of company or site visits to with the managements of Thai listed companies.

Note: Effective on 1 March 2022, Country Group Securities PCL changed its name to Pi Securities

Equity Bottom-Up

<p>We maintain Neutral rating on SPCG with new 2020E target price at Bt18.80 (from Bt22.80), derived from a discounted cash flow valuation (WACC 7.3% and terminal growth of 1.0%). This is equivalent to 7.0x PE’20E.</p><div>•SPCG posted net profit in 1Q20 of Bt749m (+8%YoY, flat QoQ).</div><div>•1Q20 earnings accounted for 29% of our 2020E forecast.</div><div>•1Q20 revenue was Bt1.46bn (+8%YoY and flat QoQ).</div><div>•Gross profit margin was 69.1%, maintained from 69.0% in 1Q19 and 69.5% in 4Q19</div><div>•SG&amp;A to sales was manageable at 5.5% (+1.0ppts YoY, -1.2ppts QoQ).
</div><div></div><p>We trimmed 2020-21E earning by 3-4%, to reflect our more conservative perspective toward solar roof business growth.</p>

We maintain Neutral rating on SPCG with new 2020E target price at Bt18.80 (from Bt22.80), derived from a discounted cash flow valuation (WACC 7.3% and terminal growth of 1.0%). This is equivalent to 7.0x PE’20E.•SPCG posted net profit in 1Q20 of Bt749m (+8%YoY, flat QoQ).•1Q20 earnings accounted for 29% of our 2020E forecast.•1Q20 revenue was Bt1.46bn (+8%YoY and flat QoQ).•Gross profit margin was 69.1%, maintained from 69.0% in 1Q19 and 69.5% in 4Q19•SG&amp;A to sales was manageable at 5.5% (+1.0ppts YoY, -1.2ppts QoQ).
We trimmed 2020-21E earning by 3-4%, to reflect our more conservative perspective toward solar roof business growth.

<p><strong>We initiate coverage of SPCG with a BUY rating and a 2019E target price of Bt22.80, derived from a discounted cash flow valuation (WACC 7.0% and terminal growth of 1.0%). This is equivalent </strong><strong>to 8.4x </strong><strong>PE’19E</strong><strong>. </strong></p>
<p><strong>The story:</strong></p>
<ul>
<li>Promising industry outlook</li>
<li>Striding toward overseas opportunities</li>
<li>Expiring adder should have been priced in already</li>
<li>Expected stable earnings in 2019-21E</li>
</ul>
<p><strong>Risks:   </strong>Single source supplier</p>
<p>                Forex fluctuation</p>
<p>                Uncertainty about sunlight</p>

We initiate coverage of SPCG with a BUY rating and a 2019E target price of Bt22.80, derived from a discounted cash flow valuation (WACC 7.0% and terminal growth of 1.0%). This is equivalent to 8.4x PE’19E. 
The story:

Promising industry outlook
Striding toward overseas opportunities
Expiring adder should have been priced in already
Expected stable earnings in 2019-21E

Risks:   Single source supplier
                Forex fluctuation
                Uncertainty about sunlight

SPCG: Laying Foundations for Next Stage of Growth

Thailand

SPCG PCL is an alternative energy company that is developing solar farms.  The Company is developing solar farms located in the Northeastern region of Thailand.

SPCG PCL (SPCG TB)

Energy (Power) - Flat Electricity Tariff and Ft for May to August

The Energy Regulatory Commission (ERC) resolved to set the electricity tariff at Bt4.18/unit and Ft at Bt0.3972/unit for May to August 2024, flat...

Krungthai XSpring

SPCG: Stable Earnings

We maintain Neutral rating on SPCG with new 2020E target price at Bt18.80 (from Bt22.80), derived from a discounted cash flow valuation (WACC 7.3%...

Pi Securities PCL, Thailand

SPCG: Laying Foundations for Next Stage of Growth

We initiate coverage of SPCG with a BUY rating and a 2019E target price of Bt22.80, derived from a discounted cash flow valuation (WACC 7.0% and...

Pi Securities PCL, Thailand